Harmony Gold Mining (HMY) Risk Factors

The Group's portion of the potential cost of settling the silicosis and TB class actions that have been instituted against it in South Africa has been provided for. The expected contributions (cash flows) to the Tshiamiso Trust, which will manage the settlement process have been discounted over the expected period of time during which contributions will be made. Annual changes in the provision consists of the time value of money (recognized as finance cost) and changes in estimates (recognized as other operating expenses). See Item 3: " Key Information - Risk Factors - Risk related to our operations and business - The cost of occupational health care services and the potential liabilities related to occupational health diseases may increase in future and may be substantial ".

Our mining and exploration activities are subject to various laws and regulations governing the protection of the environment. Estimated long term environmental obligations, comprising pollution control, rehabilitation and mine closure, are based on the Group's environmental management plans. Annual changes in the provision consist of finance costs relating to the change in the present value of the provision and inflationary increases in the provision estimate, as well as changes in estimates. The present value of environmental disturbances created is capitalized to mining assets against an increase in the rehabilitation provision. The mining asset is depreciated as discussed above. Rehabilitation projects undertaken, included in the estimates are charged to the provision as incurred. The cost of ongoing current programs to prevent and control pollution is charged against income as incurred. See Item 3: " Key Information - Risk Factors - Risks related to our industry - We are subject to extensive environmental regulations in the countries in which we operate".

Net cash provided by operations is primarily affected by the quantities of gold sold, the gold price, the Rand/US$ exchange rate, cash costs per ounce and, in the case of the international operations, the Australian dollar and PNG Kina versus US dollar exchange rate. A significant adverse change in one or more of these parameters could materially reduce cash provided by operations as a source of liquidity. Net cash generated by operations increased from R4.7 billion in fiscal 2020 to R9.2 billion in fiscal 2021. This increase is mainly due to the the higher gold price received and the inclusion of the results of the Mponeng operations and related assets.

Revenues Revenue increased by R12,488 million mainly due to a 26.1% increase in the gold produced from 37,863 kilograms in fiscal 2020 to 47,755 kilograms. The average gold price received increased by 15.7% from R735,569 per kilogram in fiscal 2020 to R851,045 per kilogram. Overall gold production increased mainly due to the inclusion of the Mponeng and MWS operations into Harmony's portfolio. These operations contributed a total of 8,948 kilograms or 18.7% of the total gold produced for the nine months from October 1, 2020. The Mponeng mine sold 5,299 kilograms for the nine months while the various surface sources acquired in the transaction sold 1,406 kilograms. The MWS operations sold 2,043 kilograms in the same period. At Kusasalethu, gold sold increased by 29.0% to 3,980 kilograms as the operation recovers from geological challenges in high grade areas during fiscal 2020. The recovered grade increased by 15.3% to 5.65g/t in fiscal 2021 from 4.90g/t supported by a 15.1% increase in ore milled. Production from waste rock dumps excluding the newly acquired surface sources saw gold sold increasing by 19.2% from 1,780 kilograms in fiscal 2020 to 2,121 kilograms during fiscal 2021. This was mainly due to an increase in the recovery grade of 17.3% to 0.460g/t during fiscal 2021. At Doornkop, gold sold increased by 18.6% from 3,038 kilograms in fiscal 2020 to 3,603 kilograms in fiscal 2021, mainly due to the recovery from the national lockdown in fiscal 2020 as ore milled increased by 25.0%. During fiscal 2021 a decision was taken to close Unisel mine as it has reached the end of its commercially viable life. Gold sold in fiscal 2021 decreased by 75.7% from 994 kilograms in fiscal 2020 to 242 kilograms in fiscal 2021. At Target 1, gold sold decreased by 27.6% from 2,237 kilograms in fiscal 2020 to 1,619 kilograms during fiscal 2021. The recovered grade decreased by 20.6% from 4.13g/t in fiscal 2020 to 3.28g/t in fiscal 2021. This was mainly due to pillar failures and backfill dilution in two massive stopes affecting the recovered grade and volumes; a revised plan was adopted in the second half of the fiscal year to address these constraints. Streaming arrangement As part of the acquisition of MWS, Harmony assumed obligations under the Franco-Nevada contract. In fiscal 2021, 16,257oz had been delivered to Franco-Nevada, bringing the balance of gold ounces to be delivered as at June 30, 2021 to 84,429oz. The non cash consideration for the delivery of gold ounces included in revenue amounted to R397 million. Cost of sales Cost of sales includes production costs, depreciation and amortization, impairment of assets and share-based payments. Production costs (cash costs/all-in sustaining costs) The following table sets out our total kilograms produced and weighted average cash costs per kilogram and total kilograms sold and weighted average all-in sustaining costs per kilogram for fiscal 2020 and fiscal 2021: Year Ended June 30, 2021Year Ended June 30, 2020Percentage(increase)/decreaseCash costsAll-in sustainingcosts Cash costsAll-in sustainingcosts CashcostsperkgAll-insustain-ingcosts perkg(kgpro-duced) (R/kg)(kg sold)(R/kg)(kgpro-duced) (R/kg)(kg sold)(R/kg)South AfricaKusasalethu3,999 742,452 3,980 814,048 3,015 849,782 3,085 923,054 13 12 Doornkop3,670 595,550 3,603 680,524 2,994 567,632 3,038 649,041 (5)(5)Tshepong Operations7,419 663,030 7,353 815,333 7,293 583,018 7,399 713,202 (14)(14)Moab Khotsong7,166 536,710 7,095 626,795 6,592 497,953 6,799 566,942 (8)(11)Mponeng5,446 532,812 5,299 659,760 - - - - n/an/aMasimong2,012 715,835 1,993 764,577 1,999 620,804 2,027 655,888 (15)(17)Target 11,603 1,037,115 1,619 1,232,098 2,244 670,647 2,237 817,066 (55)(51)Bambanani1,992 586,588 1,975 641,426 2,132 480,620 2,162 522,990 (22)(23)Joel1,424 796,982 1,414 936,296 1,391 718,024 1,412 826,970 (11)(13)Unisel247 721,271 242 782,126 982 583,274 994 613,382 (24)(28)Other - surface8,088 569,369 8,025 636,015 4,349 488,329 4,379 519,293 (17)(22)InternationalHidden Valley4,689 356,233 4,755 677,659 4,872 348,054 4,949 562,648 (2)(20)Total kg47,755 47,353 37,863 38,481 Weighted average(1)600,592 723,054 553,513 651,356 (9)(11) The offsetting of the by-product income for management's reporting purposes has the effect of decreasing the cash costs and the all-in sustaining costs. For further information about the use of Non-GAAP measures, see " Operating and Financial Review and Prospects - Costs - Reconciliation of Non-GAAP Measures " above. The South African underground operations produced lower levels of gold as a result of the impact of the national lockdown relating to Covid-19 in fiscal 2020. Our average cash costs increased by 8.5%, or R47,079 per kilogram, from R553,513 per kilogram in fiscal 2020 to R600,592 per kilogram in fiscal 2021. Cash costs per kilogram vary with the working costs per tonne (which are, in turn, affected by the number of tonnes processed) and grade of ore processed. Production costs increased by 35.5% from R22.0 billion in fiscal 2020 to R29.8 billion in fiscal 2021, mainly due to the acquisition of the Mponeng and MWS operations. Production cost for these operations amounted to R5.2 billion for the nine months from October 2020. The effect of the reduction in cost due to the national lockdown during the last quarter of fiscal 2020, annual inflationary pressures as well as higher royalties due to an increase in revenue also contributed to the increase in production cost. At Target 1, all-in sustaining cost increased by 50.8% from R817,066 per kilogram in fiscal 2020 to R1,232,098 per kilogram in fiscal 2021, mainly due to lower production mainly due to flexibility constraints in the massive stoping section and ventilation constraints that started in FY20. Combined, these affected underground grade recovered. At Bambanani, all-in sustaining cost increased by 22.6% from R522,990 per kilogram in fiscal 2020 to R641,426 per kilogram in fiscal 2021, mainly due to an increase in cost as well lower gold sold resulted from lower production and grade recovered. At Masimong, all-in sustaining cost increased by 16.6% from R655 888 per kilogram in fiscal 2020 to R764 577 per kilogram in fiscal 2021, mainly due to an increase in production cost. At Tshepong Operations, all-in sustaining cost increased by 14.3% from R713 202 per kilogram in fiscal 2020 to R815 333 per kilogram in fiscal 2021, mainly due to an increase in production cost. At Joel, all-in sustaining cost increased by 13.2% from R826,970 per kilogram in fiscal 2020 to R936,296 per kilogram in fiscal 2021, mainly due to an increase in production cost. Depreciation and amortization Depreciation and amortization increased from R3.5 billion in fiscal 2020 to R3.9 billion in fiscal 2021 year due to the operations in fiscal 2021 running for the entire year with no shutdowns, while the charge for fiscal 2020 was impacted by lower production as a result of the closure of underground operations in response to the Covid-19 pandemic. The inclusion of the Mponeng mine and related operations and assets in the asset base also contributed to the increase year on year. Impairment of assets An impairment charge of R1.1 billion was recorded in fiscal 2021. No impairment or reversal of impairment was recorded in fiscal 2020. Tshepong Operations recorded an impairment of R759 million and had a recoverable amount of R5.8 billion. The impairment was due to the updated life-of-mine plan which included a reduction in planned gold resulting from lower grade. There was also a change in the mining profile in the revised life-of-mine plan, which impacted on the timing of cash flows, which were then later than in comparison to the prior year plan. These changes affected the discounted cash flows used to determine the recoverable amount of the operation. Bambanani had a recoverable amount of R341 million in fiscal 2021 and recorded a goodwill impairment of R187 million. The impairment was mainly as a result of a reduction in grade over the remainder of the operation's life. The reduction in grade is due to unexpected changes in the orebody and a lower mine call factor. Target 3 recorded an impairment of R178 million. Previous plans to explore the sale of the operation have been abandoned and further development was considered not a viable option at this stage. Therefore management has determined a recoverable amount of Rnil. Gains/(losses) on derivatives Gains on derivatives amounted to R1,022 million in fiscal 2021, compared to a loss of R1,678 million in fiscal 2020. Gains and losses on derivatives include the fair value movements of derivatives which have not been designated as hedging instruments for hedge accounting purposes or where hedge accounting has been discontinued, the amortization of day-one gains and losses for derivatives and the hedging ineffectiveness. The day-one adjustment arises from the difference between the contract price and market price on the day of the transaction. (a) Foreign exchange derivatives Harmony maintains a foreign exchange derivative program in the form of zero cost collars, which establish a floor and cap US$/Rand exchange rate at which to convert US dollars to Rand, and forward exchange contracts. As hedge accounting is not applied, the resulting gains and losses have been recorded in the income statement. In fiscal 2021, a gain amounted to R1,217 million was recorded compared to a loss of R1,235 million in fiscal 2020. (b) US$ commodity contracts Harmony maintains a derivative program for Hidden Valley by entering into commodity derivative contracts. The contracts comprise US$ gold forward sale derivative contracts as well as silver zero cost collars which establish a minimum (floor) and maximum (cap) silver sales price. Hedge accounting has been applied to US$ gold contracts entered into after January 1, 2019. A loss of R273 million was recognized in revenue for fiscal 2021 (2020: R134 million). The unamortized portion of day-one loss was R5 million in fiscal 2021, compared with a loss of R8 million in fiscal 2020. For all other contracts, the resulting gains and losses are recorded in gains/losses on derivatives in the income statement. In fiscal 2021, a loss on derivative of R256 million was recorded in the income statement compared to a gain of R6 million in fiscal 2020. (c) Rand gold contracts Harmony entered into Rand gold forward sale derivative contracts to hedge the risk of lower Rand gold prices. Cash flow hedge accounting is applied to the majority of these contracts, resulting in the effective portion of the unrealized gains and losses being recorded in other comprehensive income (other reserves). The contracts that matured realized a loss of R1,263 million in fiscal 2020 compared to a loss of R2,023 million in fiscal 2021, which has been included in revenue. During fiscal 2021 and 2020 a negligible amount of hedge ineffectiveness was experienced. The unamortized portion of the day-one loss remained steady at R18 million in fiscal 2020 and R18 million in fiscal 2021. Gain from non-hedge accounted Rand gold contracts of R111 million was included in Gains/(losses) on derivatives in fiscal 2021 compared to a loss of R174 million in fiscal 2020. (d) Discontinuance of hedge accounting As a result of the original 21-day lockdown announced in South Africa, effective March 27, 2020, aimed to slow the spread of Covid-19, Harmony closed all deep-level underground mines in South Africa. As a result of the closure, a significant volume of the underlying exposure that was originally intended to be hedged was delayed. A total of 63,400 ounces of gold forwards were originally set to mature in the months of April and May 2020. After assessing forecasts of gold production at April 1, 2020, the hedged items, being the sales of gold, relating to 30,500 ounces of gold forwards were assessed to no longer be probable. The hedged items relating to the remaining balance of gold forwards were still considered to be highly probable. Due to the fact that the occurrence of the forecast transactions/hedged items were no longer considered probable, there was no longer an effective hedging relationship and therefore hedge accounting for these hedges was discontinued. Unrealized losses relating to the hedges amounting to R48 million and R187 million of restructured contracts discussed below, previously recognized in other comprehensive income, were immediately reclassified to profit or loss and disclosed under gains/losses on derivatives. (e) Restructuring of contracts In response to the gold forwards' hedged items no longer being probable and in order to better match the cash flows relating to the underlying exposure, certain of the Rand gold forwards with maturities between April 15, 2020 and May 31, 2020 were effectively extended to mature between the periods July 2020 and March 2021. The restructured gold forwards retained the pricing of the original forwards. They were not designated as hedging instruments as the difference in the costing structure would have required a different effectiveness assessment than currently used by management. Unrealized losses relating to the hedges amounting to R187 million, previously recognized in other comprehensive income, were immediately reclassified to profit or loss and disclosed under gains/losses on derivatives. All subsequent gains and losses on the restructured hedges were recognized in profit or loss. As at June 30, 2021, all the restructured gold forwards had matured. Corporate, administration and other expenditure Corporate, administration and other expenditure amounted to R1.1 billion in fiscal 2021 compared to R611 million in fiscal 2020. The increase was largely attributable to the acquisition integration costs of R205 million incurred in relation to the Mponeng Acquisition and an increase in remuneration costs and employee incentive payments from a reduced base in fiscal 2020 following the group-wide pay cuts in response to the Covid-19 pandemic. Foreign exchange translation gain/loss A foreign exchange translation loss of R892 million was recorded during fiscal 2020 compared to a gain of R670 million in fiscal 2021. The foreign exchange translation gain in 2021 is predominantly caused by favorable translations on US dollar loan balances which was attributable to the Rand strengthening against the US dollar. The US$/Rand exchange ended at US$/R14.27 for fiscal 2021 whereas for fiscal 2020 the rate was US$/R17.32. Other operating expenses (a) Silicosis settlement provision During fiscal 2021, Harmony's potential cost to settle the silicosis and TB class actions increased by R80 million, compared to R36 million in fiscal 2020 respectively as a result of changes in estimates. (b) Loss on scrapping of property, plant and equipment A loss on scrapping of R161 million (2020: R62 million) was recorded in fiscal 2021. This related to the abandonment of individual surface assets for which no future economic benefits are expected from their use or disposal. (c) Remeasurement of contingent consideration A remeasurement of the contingent consideration liability of R127 million relating to the Mponeng Acquisition was recorded in fiscal 2021. Acquisition-related costs Expenses of R124 million were incurred during fiscal 2021 related to various costs attributable to the Mponeng Acquisition. These costs include legal and advisory fees. Finance costs Finance costs for fiscal 2021 and 2020 remained relatively stable at R661 million mainly due to the fact that the decrease in finance costs charged on borrowings was offset by the increase in time value of money and inflation component of rehabilitation costs and the decrease in interest cost capitalized. Interest cost capitalized decreased due to the impact of the foreign exchange gain for the year on the capitalization rate calculation, resulting in a lower rate. (a) Gain on bargain purchase A gain on bargain purchase of R303 million arose in connection with the Mponeng Acquisition. At acquisition, the fair value of the net identifiable assets acquired amounted to R4.2 billion and the total consideration amounted to R3.98 billion consisting of cash consideration of R3.4 billion and contingent consideration of R544 million. Income and mining taxes In fiscal 2020 and 2021, the tax rates for companies were 34% for mining income and 28% for non-mining income for South African companies and 30% for Australian companies and PNG mining companies. Fiscal year ended June 30,Income and mining tax20212020Effective income and mining tax rate20%(43)% The effective tax rate for fiscal 2021 was lower than the mining statutory tax rate of 34% for Harmony and our subsidiaries as a whole, mainly due to the use of unredeemed capital allowances and assessed losses. Refer to note 12 " Taxation " of our consolidated financial statements for the assumptions used. These changes, together with changes in the temporary differences, had the following impacts: The change in rates on temporary differences, other than hedge accounted derivatives, resulted in an increase in the deferred tax expense and liability of R55 million. Unwinding of temporary differences related to unredeemed capital expenditure balance resulted in an increase of R301 million in the deferred tax expense. Unwinding of temporary differences related to the assessed loss balance resulted in an increase of R144 million in the deferred tax expense. The Rand strengthened during the year which had the effect of reducing the loss on the rand gold contracts that matured during fiscal 2021 as well as positively impacting those that were outstanding at June 30, 2021. The temporary differences related to the Rand gold derivatives changed from deductible temporary differences (i.e. resulting in a deferred tax asset) to taxable temporary differences (resulting in a deferred tax liability). Management assessed the rates at which the temporary differences are expected to reverse and revised the rate from the weighted average deferred tax rate to the non-mining tax rate of 28%. This accounts for R184 million of the deferred tax deficit directly charged to other comprehensive income. The net deferred tax positions for each of the group's entities are assessed separately. As at June 30, 2020 a deferred tax asset was recognized in Harmony Gold Mining Company Limited (Harmony Company) and Randfontein Estates Limited (Randfontein Estates). Subsequently, the net deferred tax asset balance had decreased due to the utilization of assessed losses, unredeemed capital expenditure and a decrease in the net derivative liability. Harmony Company's deferred tax asset balance reduced to R175 million while Randfontein Estates' deferred tax asset became a deferred tax liability. Furthermore, the newly acquired Chemwes (Pty) Limited (Chemwes Company) reported a net deferred tax asset position of R97 million. Deferred tax rates for the South African operations are calculated based on estimates of the future profitability of each ring-fenced mine when temporary differences will reverse. The future profitability of each ring-fenced mine, in turn, is determined by reference to the life-of-mine plan for that operation, which is based on parameters such as the Group's long term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation. As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the reserves may also increase or decrease based on updated or new geological information. Changes in the future profitability of each ring-fenced mine impact the deferred tax rates used to recognize temporary differences at these operations. See "-Critical Accounting Policies and Estimates - Deferred taxes " above. The movement in deferred tax on temporary differences due to changes in estimated effective tax rates results primarily from the movement in the effective deferred tax rate at Freegold (includes the Bambanani, Joel and Tshepong operations), Harmony (includes the Masimong and Unisel operations), Randfontein Estates (includes Doornkop and Kusasalethu) and Moab Khotsong. The deferred tax rate at Freegold increased from 11.4% in fiscal 2020 to 12.1% in fiscal 2021, Harmony decreased from 29.8% to 27.4% in fiscal 2021, Randfontein Estates decreased from 10.1% to 5.1% in fiscal 2021, Moab Khotsong increased from 17.3% to 17.6% in fiscal 2021. South Africa . Generally, South Africa imposes tax on worldwide income (including capital gains) of all our South African incorporated tax resident entities at a rate of 28% on non-mining income. The South African entities pay taxes separately on mining income and non-mining income. The amount of our South African mining income tax is calculated on the basis of a gold mining formula that takes into account our total revenue and profits from, and capital expenditure for, mining operations in South Africa. 5% of total mining revenue is exempt from taxation in South Africa as a result of the application of the gold mining formula. The amount of revenue subject to taxation is calculated by deducting qualifying capital expenditures from taxable mining income. The amount by which taxable mining income exceeds 5% of mining revenue constitutes taxable mining income. We and our subsidiaries account for taxes separately that are determined in respect of each entity. Hence, South Africa does not make use of any group basis of taxation. South Africa has a Controlled Foreign Company regime which effectively attributes certain types of passive income derived by offshore subsidiaries and imputes that income in taxable income as if it had been derived in South Africa under South African tax rules. Australia . Generally, Australia also imposes tax on the worldwide income (including capital gains) of all of our Australian incorporated and tax resident entities. The current income tax rate for companies is 30%. Harmony Gold (Australia) Proprietary Limited (" Harmony Gold Australia ") and its wholly-owned Australian subsidiary companies are recognized and taxed as a single entity, called a consolidated group. Under the Australian Tax Consolidation rules all of the Australian subsidiary companies are treated as divisions of the Head Company, Harmony Gold Australia. As a result, inter-company transactions between group members are generally ignored for tax purposes. This allows the group to transfer assets between group members without any tax consequences, and deems all tax losses to have been incurred by Harmony Gold Australia. PNG . PNG mining projects are taxed on a project basis. Therefore, each project is taxed as a separate entity, even though it may be one of a number of projects carried on by the same company. Capital development and exploration expenditure incurred in PNG is capitalized for tax purposes and can be deducted at 25% per annum on a diminishing value basis against project income, with the deduction being limited to the lesser of 25% of the diminished value or the income of the project for the year. PNG mining companies are taxed at a rate of tax of 30%. Mining operations in PNG are subject to a 2% royalty and 0.5% Production Levy which are payable to the PNG Government.

Depreciation of mining assets is computed principally by the units-of-production method over the life of mine, based on estimated quantities of economically recoverable proved and probable reserves, which can be recovered in future from known mineral deposits. The preparation of consolidated financial statements in compliance with IFRS requires management to assess the useful life of each of its operations separately based on the characteristics of each deposit and select the reserve/resource base that best reflects the useful life of the operation. In most instances, management considers the use of proved and probable reserves for the calculation of depreciation and amortization expense to be the best estimate of the life of the respective mining operation. Therefore, for most of the Company's operations, we use proved and probable reserves only, excluding all inferred resources as well as any indicated and measured resources that have not yet been deemed economically recoverable. In some instances, proved and probable reserves alone may not provide a realistic indication of the useful life of mine and related assets. In these instances, management may be confident that certain inferred resources will eventually be classified as measured and indicated resources, and if economically recoverable, they will be included in proved and probable reserves. Management is approaching economic decisions affecting the mine on this basis, but has not yet done the necessary development and geological drill work to improve the confidence to the required levels to designate them formally as reserves. In these cases, management, in addition to proved and probable reserves, may also include certain, but not all, of the inferred resources associated with these properties as the best estimate of the pattern in which the asset's future economic benefits are expected to be consumed by the entity. Management only includes the proved and probable reserves and the inferred resources that have been included in the life-of-mine plan. To be included in the life-of-mine plan, resources need to be above the cut-off grade set by management, which means that the resource can be economically mined and is therefore commercially viable. This consistent systematic method for inclusion in the life-of-mine plan takes management's view of the gold price, exchange rates as well as cost inflation into account. The board of directors and management approach economic decisions affecting these operations based on the life-of-mine plans that include such resources. In declaring the resource, management would have had to obtain a specified level of confidence of the existence of the resource through drilling as required by the SAMREC Code. For further discussion on mineral reserves, see "- Gold Mineral Reserves"above. In fiscal 2021 and 2020 the Company added the inferred resources that were included in the life-of-mine plans at Doornkop to the proved and probable reserves in order to calculate the depreciation expense. The difference between calculating depreciation including the inferred resources compared to not including them did not result in a significant difference for the two years. The depreciation calculation for all other operations was done using only the proved and probable reserves.

All of our gold produced in South Africa during fiscal 2019 to 2021 was refined by Rand Refinery Proprietary Limited (" Rand Refinery "). Rand Refinery is owned by a consortium of the major gold producers in South Africa and Harmony holds a 10.4% interest at June 30, 2021. Until March 31, 2019, all of our gold and silver produced in PNG was sold to The Perth Mint Australia, a Perth-based refinery. Since February 14, 2019, the metals have been sold to the Australian Bullion Corporation. Recent Developments See Item 4: " Information on the Company - History and Development of the Company - Recent Developments - Developments since June 30, 2021 ". B. LIQUIDITY AND CAPITAL RESOURCES We centrally manage our funding and treasury policies. There are no legal or economic restrictions on the ability of our subsidiaries to transfer funds to us. We have generally funded our operations and our short-term and long-term liquidity requirements from: (i) cash generated from operations; (ii) credit facilities and other borrowings; and (iii) sales of equity securities. Fiscal year ended June 30,20212020 (R in millions)Operating cash flows9,179 4,723 Investing cash flows(8,464)(3,558)Financing cash flows(4,299)4,305 Foreign exchange differences46 (106)Total cash flows(3,538)5,364

We review and evaluate our mining assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Each operating shaft, along with allocated common assets such as plants and administrative offices, is considered to be a cash generating unit as each shaft is largely independent of the cash flows of other shafts and assets. Future cash flows are estimated based on estimated quantities of recoverable minerals, expected commodity prices (considering current and historical prices, price trends and related factors), production levels and cash costs of production, capital and reclamation costs, all based on detailed life-of-mine plans. The significant assumptions in determining the future cash flows for each individual operating mine at June 30, 2021, apart from production cost and capitalized expenditure assumptions unique to each operation, included gold price, silver price and exchange rate assumptions. These are as follows: Fiscal year ended June 30, 2021 Year 1Year 2Year 3Long TermUS$ gold price per ounce1,805 1,673 1,582 1,500 US$ silver price per ounce25.72 23.22 21.70 20.70 Rand/gold price (R/kg)843,000 772,000 735,000 700,000 Rand/US$ exchange rate 14.54 14.36 14.44 14.51 US$/Kina exchange rate3.50 3.50 3.50 3.50 South AfricaHidden ValleyUS dollar per ounceUnderground resourcesMeasured16.50 n/aIndicated9.00 n/aInferred3.60 n/aSurface resourcesMeasured30.00 n/aIndicated17.50 9.00 Inferred8.00 n/a Key assumptions for the calculations of the mining assets' recoverable amounts are the commodity prices, resource values, marketable discount rates, costs to sell, exchange rates and the annual life-of-mine plans. In determining the commodity prices and resource values to be used, management assesses the long-term views of several reputable institutions on commodity prices and based on this, derives the commodity prices and resource values. The recoverable amount of mining assets is determined utilizing real discounted future cash flows or resource multiples in the case of undeveloped properties and certain resource bases. For this reason, the underground resource value has been applied to Target North and Doornkop's Kimberly Reef and the surface resource values have been applied to the Mispah Tailings resource, Vaal River and West Wits surface sources, as presented in the table above. The term "recoverable minerals" refers to the estimated amount of gold that will be obtained from proved and probable reserves and related exploration stage mineral interests, except for other mine-related exploration potential and greenfields exploration potential discussed separately below, after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management's relative confidence in such materials. With the exception of other mine-related exploration potential and greenfields exploration potential, estimates of future undiscounted cash flows are included on an "area of interest" basis, which generally represents an individual operating mine, even if the mines are included in a larger mine complex. In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential, cash flows and fair values are individually evaluated based primarily on recent exploration results and recent transactions involving sales of similar properties. As discussed above under "- Gold Mineral Reserves ", various factors could impact our ability to achieve our forecasted production schedules from proved and probable reserves. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proved and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically. Assets classified as other mine-related exploration potential and greenfields exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling. Management performed an assessment for impairment triggers as well as indications of reversal of previously recorded impairment losses at June 30, 2021. Due to the group net asset value (before any impairments being recognized or the finalization of the fair value exercise on the acquisition of the Mponeng operations and related assets) exceeding the market capitalization of Harmony as at June 30, 2021, the recoverable amounts for these cash-generating units (" CGUs ") were calculated. The recoverable amounts for these assets were determined on a fair value less cost to sell basis. Due to the volatilities experienced in the markets and the uncertainty in forecasting future cash flows due in large part to the impact of the Covid-19 pandemic, management has used various probability scenarios in determining the recoverable amounts for the CGUs at June 30, 2021. The following were factored into management's judgments: infection rates and the timing of the expected peaks in the provinces and/or countries that Harmony's operations are situated in;expected disruptions to production together with the mitigation strategies management has in place;potential duration of the impact of the virus (prior and post vaccination) and the related restrictions in operations; and expectation of the completion date of the vaccination program at a Harmony and governmental level. Management included estimates of the staffing costs for screening and monitoring employees at work as well as those that are in quarantine. Further costs have been included in the life-of-mine plans for the cost of the vaccination program and the scenarios used by management include further potential costs if vaccinations are required in the future at various intervals. In preparing the various scenarios, management considered and varied: the potential impact on production and therefore on the revenue cash flows, based on historical trends that have been extrapolated to account for varying disruption levels;the duration of potential disruptions to production, ranging from 12 months to 24 months; and the infection rates and associated costs as well as vaccination costs; this included impacts on production as well as considerations of the potential requirement to re-vaccinate in coming years. The calculated cash flows were then weighted based on management's expectation of each of the scenarios occurring. The resulting amounts were discounted using the specific discount rate for each operation in order to determine the recoverable amount. Based on the impairment tests performed, impairments were recorded on certain operations for the 2021 fiscal year. Where CGUs had previously been impaired, management considered whether the impairment loss (or the contributors to the previously recognized impairment loss) no longer exists or might have decreased. Management considered general and specific factors for each CGU and concluded that although overall the gold price had improved from the time that the impairment losses had been recognized, the specific circumstances that led to the original impairments had not reversed. Furthermore, the service potential of the asset has not increased. Due to the continued volatility seen in the gold prices as well as the exchange rates, coupled with the fact that the factors resulting in the previously recognized impairment losses had not reversed, as well as the group net asset value exceeding the market capitalization, management resolved it to be appropriate for no reversal of previously recognized impairment losses to be recorded for the period under review. During fiscal 2021 we recorded an impairment of R1.1 billion. Material changes to any of these factors or assumptions discussed above could result in future impairment charges, particularly around future commodity price assumptions. A 10% decrease in commodity price assumptions at June 30, 2021 would have resulted in impairments as follows: (R millions)Tshepong Operations5,325 Target 11,267 Joel359 Kusasalethu821 Bambanani*413 Other assets101 Moab Khotsong*1,916 Kalgold390 Doornkop1,914 Target 3178 Mponeng2,249 Mine Waste Solutions96 West Wits35 *The goodwill balance attributed to this cash generating unit would be reduced first. See "- Carrying Value of Goodwill " below. A 10% increase would have resulted in an impairment of R178 million being recorded at Target 3. At all other operations, a 10% increase would not have resulted in any impairments being recorded. This analysis assumes that all other variables remain constant.